Rate Cut Aims to Support Growth Amid Rising Risks

The latest policy rate cut of the Bangko Sentral ng Pilipinas was driven by the need to support domestic growth, which has been hit by rising global uncertainties that could dampen both investment and consumption, BSP Governor Eli Remolona Jr. said.

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"We're trying to keep our economy operating as close to capacity as possible," Remolona told One News' Money Talks host Cathy Yang. "That capacity has to grow because of investment, and our role is to keep the economic environment stable enough for that investment to materialize," he said.

"I think all things considered, our growth is still robust. It's still pretty good. Nonetheless, I think it's not as strong as it could be, which is part of the reason why we cut the policy rate," Remolona said.

The Philippine economy grew by 5.4 percent in the first quarter, below the government's six to eight percent full-year target.

To meet the lower end of that range, growth will have to hit at least 6.2 percent in the remaining quarters—a goal Remolona said is still achievable, but increasingly challenged by geopolitical risks.